Page 18 - bne IntelliNews Russia OUTLOOK 2025

In December the US was toying with the idea of expanding the sanctions to cover more of the 400-strong Russian shadow fleet, but Washington’s hand has been hesitant due to fears of constricting the flow of oil and spiking prices.
However, more US sanctions on the shadow fleet are expected and possibly lower the cap to $40 per barrel. The EU says it will add more restrictions in the sixteenth package of sanctions.
Some analysts believe that under Trump the tactics may change and the US will attempt to bring down the price of oil to $40 by ramping up production in a market already short of demand and long in supply as a way of reducing the Kremlin’s income.
Technology sanctions
Like the oil sanctions, the technology sanctions have largely failed. Russia imported only 2% less technology by value in 2023 than it did a year earlier, although some high tech products have become harder to get. A myriad network of intermediaries has sprung up to transship Western-made technology to Russia. A recent study by Peterson Institute for International Economics (PIIE) found the scams were as simple as ordering technology online and having it sent to shell companies in Hong Kong or Dubai.
The EU has demanded that technology companies make more of an effort to find out who the ultimate buyers of their goods are, but another EU study found that the daisy chain of intermediates can be as long as 40 trading companies, making that task impossible.
Proponents of better enforcement point to the banking sector’s well developed compliance practices, but Western companies remain reluctant to set up such onerous systems and argue that goods are harder to track than money, which generates extensive records at every step of any journey.
US financial sanctions
By far the most effective sanctions introduced by Washington were the sanctions targeting international banks working with Russia, threatening them with secondary sanctions, following the executive orders in December 2023. As a result, by May several Chinese and Turkish banks had cut ties with their Russian clients.
Liquidity problems started in earnest in June 2024, when OFAC slapped sanctions on the Moscow Exchange (MOEX), causing the CBR to immediately halt trading in dollars and euros, sending demand for the
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